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Storms can strengthen as it travels through an ocean. In order to prevent damages, the government has to increase its spending to prepare its residents.
Storms can strengthen as it travels through an ocean. In order to prevent damages, the government has to increase its spending to prepare its residents.
a. Suppose that this storm hits many countries in a region. Can you explain how the trade balance and the real exchange rate of a small open economy will be affected by the increases in government spending? How will this look like in a figure or graph?
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